The Hansen Technologies Limited (ASX:HSN) share price rose 2% to $3.95 after the company released strong half year results this morning. Operating revenues grew 36% to $86.9 million and earnings before interest, tax, depreciation and amortisation (EBITDA) grew 41% to $33.8 million. Net profit after tax rose 33% to $18 million.
Most of the growth was driven by the acquisition of Nordic customer information system provider Enoro, which contributed all but $2.4 million of the $31.5 million increase in revenue. Excluding Enoro, Hansen's core billing revenues grew 4%. Much of the growth in EBITDA was also likely due to Enoro, which is a lower margin business. Enoro is Hansen's largest acquisition to date, so it was pleasing to see management report that integration is moving on according to schedule.
Hansen reported free cash flow was a solid $20.5 million due to high cash conversion, and net debt fell to $17.2 million. Earnings per share grew 37% to 11.7 cents per share, and Hansen announced an interim dividend of 3 cents per share.
Management reported in their outlook that, assuming similar foreign exchange rates, they expected to report slightly lower revenues in the second half due to some non-repeating projects. EBITDA margins are expected to be on target at between 25% and 30%. Hansen also expects to benefit from a substantially lower corporate tax rate as a result of lower tax rates in Finland (20%) and Norway (24%), as well as the tax cuts in the USA (from 35% to 28% currently, falling to 21% in financial year 2019).
Hansen is a family-run billing software company that is known for its recurrent revenues and 'sticky' customers. It ticks a lot of boxes for me, and management has so far acquired in a way that generates significant value for shareholders. I think Hansen is an interesting company and worthy of closer investigation.
